JSE unlikely to recover much on Friday as markets ponder coronavirus outbreak

There are few signs that the JSE is set for a rebound on Friday morning, after global markets slumped on Thursday due to escalating concerns over the coronavirus pandemic.

The local bourse had its worst day since 1997 on Thursday, with global stocks pummeled by the growing outbreak, as well as concerns that governments will not respond fast enough.

There is concern that the outbreak will get worse, said AxiCorp chief Asia market strategist Stephen Innes in a note.

“Global supply chains are no longer just ‘disrupted’ but are now in the process of shutting down completely,” he said.

Large scale events are banned and schools closed. 

So far, the US government has offered little to soothe the market as President Donald Trump’s payroll tax cut and travel ban have been met with fierce criticism, said BK Asset Management MD for foreign exchange strategy Kathy Lien in a note.

In morning trade on Friday the Shanghai Composite was down 3.32% and the Hang Seng 5.54%. Japan’s Nikkei had fallen almost 10%.

Tencent, which influences the JSE via major shareholder Naspers, had lost almost 5%.

Gold had lost 1.05% to $1,559.86/oz, while platinum had risen 1.59% to $772.28/oz. Brent crude had fallen 0.12% to $32.86 a barrel.